Matt Bevin on Social Security

401(k)-style plan for state employee pensions struck down

The Kentucky Supreme Court's ruling against the controversial pension reform bill handed a decisive victory to state Attorney General Andy Beshear. That victory comes at the expense of Republican Gov. Matt Bevin, who pushed for the law.

The unanimous, 7-0, decision upholds a June ruling by Franklin Circuit Court Judge Phillip Shepherd who struck down the law, known as Senate Bill 151.

Andy Beshear took aim at Bevin: "This is a landmark win for our hardworking teachers,
police officers, firefighters, EMS, social workers and all city, county and state employees," Beshear said. "Our government broke its promise and betrayed its people."

Bevin's bill proposed a new
401(k)-style plan. While the Supreme Court ruling doesn't fix the state's huge pension debt, it does maintain the same plan educators expected.

More state contribution to $43B unfunded state pension plan

Kentucky's eight pension plans recently reported having $42.7 billion in unfunded liabilities, including both pension and health plans. That figure is a slight improvement over a year ago due largely to big increases during the Bevin administration in
the state's contribution to the funds. But the financial condition of the main pension plan covering most state government workers got worse last year and now has only 12.9% of the funds it will need to pay future benefits.

Increase taxes to fund Kentucky Retirement Systems

Bevin also promised to cut the state's inventory and estate tax, but said he expects other taxes to increase in order to ensure the state can pay its growing pension obligations, which Bevin called a crisis. "That's not a pension system," Bevin said of
the Kentucky Retirement Systems. "That's a checking account and it's about to go bankrupt."

Bevin said lawmakers must examine every aspect of the tax code and that there will be "sacred cows" that are turned into hamburger.

Source: 2017 Kentucky State of the State address
, Feb 8, 2017

Replace public pension system with 401(k) for new employees

It's time for a Governor who will deal with Kentucky's unfunded pension liabilities that are in excess of $20 billion and likely more than double that amount. Our plan will fix our public retirement system while ensuring that we meet the existing
obligations we have made to retired state workers. This starts with instituting an immediate freeze on the expansion of participants in our current pension plans and implementing a 401(k) style defined contribution plan for new employees.